The white House has announced that it would block federal funds from states that impose heavy rules on artificial intelligence. According to the administration, the new WHITE House Action Plan, which is expected to be unveiled soon, will cut funding to states with “burdensome” rules.
The 28-page outline also clarifies that thoughtfully crafted legislation would be allowed, provided it support innovation. “AI is far too important to smother in bureaucracy at this early stage, whether at the state or Federal level,” the plan states. It was written by White House Crypto Czar David Sacks, Secretary of State Marco Rubio, and Office of Science and Technology Policy Director Michael Kratsios.
The White House announces plans to foster innovation
Under this guidance, agencies are expected to check the AI regulation in each state before funds are released. They are also allowed to cut or hold onto funds if they think the state’s rules will weaken federal support. It also urges the FCC to assess whether any state‑level AI laws clash with its regulatory jurisdiction. However, Congress has seen parallel proposals.
A House bill, known as the “Big Beautiful Bill,” would ban states from setting AI rules for 10 years, with Senator Ted Cruz’s plan tying federal funding to states rolling back tough AI regulations. United States President Donald Trump described the initiative as the biggest move so far for a sector he believes will reshape the global economy. He is expected to sign orders directing the United States International Development Finance Corporation and the Export‑Import Bank to promote American tech abroad and requiring any large language models used by federal agencies to meet neutrality and fairness standards.
Trump’s AI Plan shaped by 10,000 public comments
Critics argue that the plan favors large tech companies over the public. “The White House AI Action plan was written by and for tech billionaires, and will not serve the interests of the broader public,” said Sarah Myers West, co‑executive director of the AI Now Institute.“The administration’s stance prioritizes corporate interests over the needs of everyday people who are already being affected by AI,” West added.
The approach is in contrast to President Joe Biden’s executive order to establish a federal AI safety and security standard in 2023. Trump revoked the order on his first day in office, issuing a new order mandating faster AI advancement, eliminating ideological bias, and opening the framework to public feedback. Officials say more than 10,000 public comments shaped the plan, as mentioned in a BBC report.
Furthermore, AI regulation became a major point of debate in talks over Trump’s budget bill, which Congress approved earlier this month. The administration also worked to grow America’s AI systems at home and abroad. Following his inauguration, Trump announced a joint venture, Stargate, partnering with SoftBank, Oracle, and OpenAI, to develop roughly $100 billion in data center resources. However, the project has been stalled for 6 months.
In May, he traveled with tech leaders to Gulf countries to secure AI infrastructure deals. Trump also took AI measures abroad. He first blocked exports to Huawei and other Chinese firms to slow their AI progress, then relaxed some limits on selling Nvidia and AMD chips to China so U.S. companies could compete better.
